Engineering Contracts and Procurement
PART A: Review of contract strategy from the Owners perspective.
Benefits and risks associated with using the contracting form nominated.
One of the risks of using the nominated contracting form is that a condition precedent is not met, or a sunset clause passes without action. For such a threat, the best-case scenario would be that this would be a relatively minor clause with nothing else reliant on it, and both parties would amicably agree to rectify it and carry on as if nothing happened. However, the worst-case scenario that works may not commence until the agreed on measures are in place, and this may be too much for your organization to bear. For example, a lapsed insurance policy discovered after an injury has occurred would be the gravest mistake your organization ever makes.
The second risk would be a missed deadline, milestone, or deliverable. This is the most common failure of ad hoc systems. For this risk, the best-case scenario would be that the deadline is one that has no lasting effects, and the delay caused is minor. The worst-case scenario would be going bankrupt over these missed deadlines. This could be as a result of expensive litigation which might result in both financial and reputational ruin. You can avoid this risk by ensuring you have a centralized data management tool to manage critical dates.
The third risk would be the contract could contain an automatic rollover clause. For this risk, the likeliest scenario would be the loss of your bargaining power, and you would lose the opportunity to terminate, re-tender, or negotiate changes. The worst thing about this risk would be getting stuck with services you no longer need.
The fourth risk would be the inconsistent treatment of contracts or ad hoc document management systems. Here the best case would be that the employees with the required knowledge are always at work and if they aren’t that they would be willing to share that information. The worst would be that the budget blowouts due to unchecked scope range and perceived incompetence of the organization.
For your selected project, identify three to five critical risks or opportunities. Enough detail is to be provided to justify the significance of placing these risks as priorities.
One of the critical risks that Monash Health will be exposed to is that they are financially responsible for all repairs and replacement of spare parts, whether these repairs or replacements are necessary or not. They may incur unnecessary expenses because all maintenance services and repairs are to be carried out by the successful tenderer. If the tenderer decided to inflate the prices of replacements or exaggerate the extent of repairs, MH has no way of knowing that they are paying unnecessarily.
PART B: Developing a winning strategy
- Planning ahead
This will give time to work on the bid to present a higher quality of work. Part of planning will require knowing what you are capable of delivering. It will give you time to spend on planning and curating your response, which will enhance the quality of your tender response. Ensure that you choose references that are relevant to the tender requirements of MH. Also, ensure that the point of contact you give is somebody who can give a testament to the services you promise to deliver.
- Ensure you know what you are bidding for.
The specification is always included in the invitation to tender documentation. Your response’s quality is your chance to demonstrate your ability and relate your answers to their specifications. This is your opportunity to show that you can deliver on your promises. The specifications of MH invitation to tender documents include a warranty on repairs and associated spare parts.
- Ensuring that answers to questions are relevant and appropriate. You should read the questions thoroughly when writing your tender response. Be specific in your answers, have subheading, and only include relevant information because having pages of un paragraphed and disorganized text can make whoever reviews your tender miss out on the critical points.
- Be specific and only present the information that is relevant to the buyer. Specificity suggests that you are credible and accountable and make your delivery proposals concrete and realistic. For instance, on MH tenderers’ response, when you name the subcontractor, mention their name. Give their address and specify precisely what kind of services they will provide.
- Present evidence to reinforce your points in your response. The MH tenderers’ response asks you to provide details of the methodology you propose to provide the services. Here you should endeavor to cover and answer the questions, what you will do, how you will do it, when, and if you have done it before, and finally, whether what you are proposing is a good idea. Include references to other contracts where you provided similar services. This shows that you have got the experience and will give MH the confidence that you are competent.
- The tender response should be creatively made. This creativity should encompass both the content and the presentation. Include anything that will reduce the cost and add value to your contract without lowering the services’ quality. Do not submit a response that is not visually appealing or that is written in Calibri font on a blank document. You should impress the buyer by presenting the content in a professional, brand-specific manner.
- Pricing includes fixed quotation for the works, schedule of rates for different activities, a simple acceptance of a promise to work within a budget. Finally, it would help if you proofread your final submission thoroughly.
REFERENCES
Tender Writing Consultants: Bid Management: Bid Writers: Hudson |. (2020, September 09). Retrieved September 21, 2020, from https://www.tenderconsultants.co.uk/
Newstead, R. (2017, March 23). Top 4 Contract Risks & How To Avoid Them. Retrieved September 21, 2020, from https://procurementandsupply.com/2017/03/top-4-contract-risks-how-to-avoid-them/